BMO Nesbitt Burns Securities Ltd.

Headnote

National Policy 11-203 -- Process for Exemptive Relief Applications in Multiple Jurisdictions -- Foreign registered broker-dealer and agents exempted, subject to certain conditions, from the dealer, adviser and underwriter registration requirements and the prospectus requirements that permit dealing with individuals referred to in sections 2.1 and 3.1 of National Instrument 35-101 -- Conditional Exemption from Registration for United States Broker-Dealers and Agents, notwithstanding that the Filer has an office or other physical presence in Canada

Applicable Legislative Provisions

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25(1), 25(2), 25(3), 53

Instruments Cited

National Instrument 35-101 -- Conditional Exemption from Registration for United States Broker-Dealers and Agents, ss. 2.1, 3.1

April 11, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the Jurisdiction)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

BMO NESBITT BURNS SECURITIES LTD.

(the Filer)

DECISION

Background

The securities regulatory authority or regulator in the Jurisdiction (the Principal Regulator) has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the Legislation) of the Principal Regulator for an exemption that:

(a) where persons (Dual Representatives) who are salespersons or officers of the Filer, and who are also registered under the Legislation to trade on behalf of BMO Nesbitt Burns Inc. (NBI) as salespersons or officers of NBI, act on behalf of the Filer in respect of trades in securities with, or on behalf of, persons or companies (U.S. Clients) who are resident in the United States (U.S.), the Dual Representatives and the Filer shall not be subject to the dealer registration requirement; and

(b) the dealer/underwriter registration requirement, adviser registration requirement, and prospectus requirement shall not apply to the Filer and its agents so as to permit them to deal with an individual referred to in Section 2.1 and Section 3.1 of National Instrument 35-101 (NI 35-101) -- Conditional Exemption from Registration for United States Broker-Dealers and Agents (NI 35-101 Clients), provided that such dealings are conducted in accordance with all terms and conditions of NI 35-101, save and except for the requirement that the Filer has no office or physical presence in any jurisdiction of Canada, and so as to permit salespersons or officers of the Filer who are also registered to trade on behalf of NBI as salespersons or officers of NBI, to act on behalf of the Filer in respect of trades in securities with, or on behalf of, U.S. Clients or NI 35-101 Clients (collectively, the Exemptions Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the Principal Regulator for this application, and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, Quebec and Saskatchewan.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is registered as a broker-dealer under the U.S. Securities Exchange Act of 1934, as amended, and a member of the Financial Industry Regulatory Authority. The Filer is not a registered dealer in Canada.

2. The Filer is incorporated under the laws of Canada with its head office in Ontario.

3. The Filer is an affiliate of NBI, which is registered as a dealer under the Legislation in the category of investment dealer and is a dealer member of the Investment Industry Regulatory Organization of Canada.

4. Both the Filer and NBI are wholly-owned indirect subsidiaries of Bank of Montreal.

5. Wherever the Filer has an office in Canada, the Filer operates out of the same premises as NBI.

6. The Filer previously received a dealer registration exemption in each of the provinces of Canada that permit Dual Representatives of the Filer, who are also registered under securities legislation to trade on behalf of NBI, to act on behalf of the Filer in respect of trades in securities with or on behalf of U.S. Clients, without the Filer and its Dual Representatives being subject to dealer registration requirements (the Dual Representative Exemptions).

7. One of the representations made in the Dual Representative Exemptions was that the Filer and its Dual Representatives would not trade in securities with or on behalf of persons or companies who are resident in Canada.

8. Some of the former U.S. Clients of the Filer pursuant to the Dual Representative Exemptions have moved to Canada with Individual Retirement Accounts (IRA accounts) and wish to continue to place trades with the Filer for their IRA accounts.

9. NI 35-101, which was not in force at the time that the Dual Representative Exemptions were issued, provides for exemptions from the dealer/underwriter registration requirement, adviser registration requirement, and prospectus requirement for U.S. broker-dealers and their agents trading with or for NI 35-101 Clients, upon satisfying certain conditions.

10. The Filer intends to rely upon NI 35-101 with respect to its dealings with NI 35-101 Clients and U.S. Clients.

11. Provided that the requested decision is issued, the Filer intends to immediately cease relying upon the Dual Representative Exemptions.

12. It is a condition of the exemption for broker-dealers in clause (a) of Section 2.1 of NI 35-101 that the broker-dealer has no office or other physical presence in any jurisdiction in Canada.

13. It is a condition of the exemption for agents in clause (b) of Section 3.1 of NI 35-101 that the agent has no office or other physical presence in any jurisdiction in Canada.

14. As a consequence of the trading activity that is accommodated by the Dual Representative Exemptions, the Filer is unable to rely on NI 35-101 as it has an office or other physical presence in Canada as a result of its Toronto, Ontario head office and other Canadian offices.

15. As a consequence of some former U.S. Clients of the Filer pursuant to the Dual Representative Exemptions having moved to Canada, the Filer wishes to trade, as otherwise permitted by NI 35-101, with persons or companies in Canada.

Decision

The Principal Regulator is satisfied that the decision meets the test set out in the Legislation for the Principal Regulator to make the decision.

The decision of the Principal Regulator under the Legislation is that the Exemptions Sought are granted, provided that the only physical presence or offices that the Filer has in Canada are the premises that it shares with NBI.